Eric Vishria, a General Partner at Benchmark Capital and former CEO of RockMelt, discusses the dynamic landscape of AI investments. He shares insights on the commoditization of foundation models and why Nvidia won't dominate the market forever. Eric differentiates between successful high-quality AI applications and those riding the hype wave. He also explores Benchmark's decision-making process for new deals, revealing the complexity of analyzing AI startups and the importance of understanding revenue quality in this fast-evolving sector.

Eric Vishria, General Partner at Benchmark Capital, discusses the role of venture capitalists, characteristics of successful entrepreneurs, the impact of artificial intelligence on business, and the evolution of early stage investing. He also shares insights on evaluating investments, the value of authenticity in founders, and building strong relationships with entrepreneurs.

Benchmark GPs Sarah Tavel and Eric Vishria discuss central ideas of Benchmark's firm-building beliefs, including platform teams' role in aiding general partners. They explore venture capital challenges, the impact of capital on investment strategy, and the importance of playing your own game in a competitive market.

My guest this week is Eric Vishria, a general partner at Benchmark Capital. Eric joined Benchmark after spending the first part of his career as an operator and CEO. The topic of our conversation is the past, present, and future of software businesses. We begin by explaining why public software companies trade at such incredibly high multiples today. We then explore the several different generations of these businesses and why the future remains so bright for companies building software as their primary product. I’d go one step further and suggest that the information in this episode is even more valuable for non-software businesses and investors, because its crucial to understand the impact that these products will have on the overall business landscape. COVID has accelerated the long-running transition to digital across the corporate world, and Eric serves as the perfect guide. Let’s dive in.    This week’s episode is sponsored by Bottomless. Bottomless is a smart coffee subscription which automatically re-orders coffee for you based on your consumption habits.  Bottomless is offering one month and your second bag of coffee for free at bottomless.com/patrick.   For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club and new email newsletter called “Inside the Episode” at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag   Show Notes (2:29) – (First question) – His take on public markets, and specifically as it relates to SaaS businesses (4:04) – Why these companies trade so high             (7:53) – Peter Zeihan Podcast Episode (11:19) – The competitive frontier in the digital markets (14:02) – The API competitive frontier             (14:22) – Chetan Puttagunta Podcast Episode             (18:36) – Every Company is Becoming a Software Company             (20:10) – John Collison Podcast Episode (22:54) – Charging in an API business model (24:09) – Describing the different generations of SaaS, starting with Gen 1 (28:15) – Gen 2 SaaS businesses (31:52) – Being an investor in SaaS (36:55) – Gen 3 and importance of traditional SaaS companies to get into API (38:06) – Other problems software can solve (44:19) – Why more money isn’t going into SaaS (46:48) – Lessons from the investment universe and how it could apply to SaaS             (47:26) – The Hierarchy of Marketplaces — Introduction and Level 1 - Sarah Taval (51:49) – Lessons about scaling (57:51) – Cross customer strategy             (1:00:01) – Energy and Civilization: A History (1:01:28) – Qualities of an interesting investor (1:03:52) – Kindest thing anyone has done for him   Learn More For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club and new email newsletter called “Inside the Episode” at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag  

General partner Eric Vishria from Benchmark and Quilter Founder Sergiy Nesterenko discuss Benchmark's investment philosophy in the AI era, emphasizing the importance of solving enduring problems, Quilter's innovative use of reinforcement learning in circuit board designs, the shift towards fully automated AI solutions, and the balance between research and engineering in the AI space.